Buyers & Sellers

Information and Links to help Buyers and Sellers

 

BUYERS

Buying a home can be one of the most important decisions in a persons life. Assembled below are some helpful resources to help you in the buying process.

Steps to Home Ownership

Buyer obtains loan pre-qualification from lender.

Buyer purchases desired home with Real Estate Agent’s help.

Contract is accepted and home is placed in escrow.

Loan application is submitted to lender.

Lender orders title & property appraisal.

Loan submitted to underwriting for approval.

The loan is funded & recorded.

Buyers get the keys to their new home.

 

Get Pre-qualified
Most Real Estate Agents and Lenders recommend that home buyers get pre-qualified before selecting a home to purchase. This way you will be prepared to preview and negotiate your home purchase with confidence.

With pre-qualification you can determine which loan program best fits your needs. You will know exactly how much you are qualified for. It’s no fun to find your “ideal home” and then find out you can not afford it. It allows you to see what the down payment and closing will be. If you are a first time homebuyer, you may be able to qualify for a special first time homebuyer program, saving money or allowing a larger purchase price. Meeting with your lender to preview your financial options prior to shopping for your new home affords you the opportunity to consider what you really want and need before the emotions of purchasing your home engage.

Types of Loans

Adjustable Rate Mortgage
Adjustable rate mortgages have an interest rate that is adjusted at certain intervals based on a specific index during the life of the loan.

Balloon Payment Loan
A fixed rate loan that is amortized over 30 years but becomes due and payable at the end of a certain term. May be extended or may roll-over into another type of loan.

Buy-Down Loan
Buy-Down Loans are fixed rate loans where the interest rate and the payment are reduced for a specific period of time by passing the interest up front to subsidize the lower payment.

Community Home Buyers Program
A fixed rate loan for the first time home buyer with a low down payment usually 3-5 %, no cash reserve requirements and easier qualifying ratios. Qualification is subject to borrower meeting income limits and attendance of a four hour training course on home ownership.

Conventional Loan
Conventional loans are sometimes more lenient with the appraisal and condition of the property. When you are buying a “fixer upper” you may need to use a conventional loan.

FHA Loan
FHA loans are insured by the Federal Housing Administration under H.U.D. They offer a low down payment and are easier to qualify than conventional loans.

Fixed Rate Loan
A fixed rate loan has one interest rate that remains constant throughout the life of the loan.

Graduated Payment Mortgage
A fixed rate loan that has payments starting lower than a standard fixed rate loan, which then increases by a predetermined amount each year for a set number of years.

Mortgage Credit Certificate
A first time home buyer program is subject to purchase price and income limits to some areas. It is actually a special tax credit and assists the buyer in qualifying for many loan programs.

Non-Qualifying Assumable Loans
Non qualifying loans are pre-existing loans which can be assumed by a buyer from the seller of a property without going through the qualifying process. The buyer pays the seller for their equity and then starts making payments.

VA Loan
VA loans are guaranteed by the Veterans Administration. A veteran must have served 180 days of active service. The maximum VA loan is currently $203,000 with no down payment.

 

Closing Costs

Title Insurance Premium
Fee paid by an individual to insure he has a marketable title or-in the case of a lender-to insure their lien position.

Real Estate Commission
Fee paid to a real estate broker for services rendered in listing, showing, selling and consummating the transfer of property.
Transfer and Assumption Charges
Fees charged by a lender to allow a new purchaser to assume an existing loan.
Recording Fees
Fees assessed by a county recorder’s office for recording the document of a real estate transaction.
Loan Fees
Fees charged by a lender in connection with the processing of a new loan. These may include points, origination fee and credit report.
Escrow Fees
Fees charged by a title and/or escrow company for services rendered in preparing documents necessary in the consummation of a real estate transaction.
Additional Settlement Costs
Taxes, insurance impounds and interest prorations, termite inspection fees, tax prorations. Title or escrow company personnel will review and explain your closing statement when you prepare to close your transaction and take ownership of your new home.
5 year short term rate (20% savings in title fees) applies to any property which has had a title insurance policy issued in the past five years.
Planning to resell within 2 years? Pay an additional 10% of the title fee at escrow’s close. Sell within 2 years and 100% of the original fee will be credited. The complete title fee cost? Just the 10% of the original title fee. This is an attractive plan for investors and relocation prospects. Refinance rate is 70% of base rate. (Short term rate does not apply).
It’s the big day. You go to the title company, sign your name on the dotted line hand over a check and prepare to take ownership of your new home. It’s also the day that you and the seller will pay “closing” or settlement costs on an accumulation of separate charges paid to different entities for the professional services associated with the buying and selling of real property.

Supplemental Property Taxes

The Title Consumer
Understanding Supplemental Property Taxes
Supplemental property taxes have been with us since July of 1983, but you and your neighbors still may not know what they are, what they do, and how they affect you and your property. To help you better understand this confusing subject, below you will find answers to some of the questions most commonly asked about supplemental real property taxes.

When did this tax come into effect?
The Supplemental Real Property Tax Law was signed by the Governor in July of 1983 and is part of an ambitious drive to aid California’s schools. This property tax revision is expected to produce over $300 million per year in revenue for schools.

Q: How will Supplemental Property Taxes affect me?
A: If you don’t plan on buying new property or undertaking new construction, this new tax will not affect you at all. But, if you do wish to do either of the two, you will be required to pay a supplemental property tax which will become a lien against your property as of the date of ownership change or the date of completion of new construction.

Q: When and how will I be billed?
A: “When” is not easy to predict. You can be billed in as few as three weeks, or it could take over six months. “When” will depend on the individual county and the workload of the County Assessor, the County Controller/Auditor and the County Tax Collector. The assessor will appraise your property and advise you of the new supplemental assessment amount. At that time, you will have the opportunity to discuss your valuation, apply for a Homeowner’s Exemption, and be informed of your right to file, an Assessment Appeal. The county will then calculate the amount of the supplemental tax and the tax collector will mail you a supplemental tax bill. The supplemental tax bill will identify, among other things, the following information: the amount of the supplemental tax and the date on which the taxes will become delinquent.

Q: Can I pay my Supplemental Tax Bill in installments?
A: All supplemental taxes on the secured roll are payable in two installments. The taxes are due on the date the bill is mailed and are delinquent on specified dates depending on the month the bill is mailed as follows: (1) If the bill is mailed within the months of July through October, the first installment shall become delinquent on December 10 of the same year. The second installment shall become delinquent on April 10 of the next year. (2) If the bill is mailed within the months of November through June, the first installment shall become delinquent on the last day of the month following the month in which the bill is mailed. The second installment shall become delinquent on the last day of the fourth calendar month following the date the first installment is delinquent.

Q: How will the amount of my bill be determined?
A: There is a formula to determine your tax bill. The total supplemental assessment will be prorated based on the number of months remaining until the end of the tax year, June 30.

Q: Can you tell me how the proration factor works?
A: The supplemental tax becomes effective on the first day of the month following the month in which the change of ownership or completion of new construction actually occurred. If the effective date is July 1, then there will be no supplemental assessment on the current tax roll and the entire supplemental assessment will be made to the tax roll being prepared which will then reflect the full cash value. In the event the effective date is not on July 1, then you may wish to contact your County Tax Assessor’s office.

Q: Will my taxes be prorated in escrow?
A: No, unlike your ordinary annual taxes, the supplemental tax is a one time tax which dates from the date you take ownership of your property or complete the construction until the end of the tax year on June 30. The obligation for this tax is entirely that of the property owner.

Below is a list of items that you will need at your appointment to sign escrow papers:

Cashier’s Check – Obtain a cashier’s check made payable to the title company in the amount indicated by your Escrow Officer.  Do not bring a personal check as this will delay closing since the title company is required by law to verify good funds before disbursing funds from escrow.

Identification:

There are several acceptable forms of identification that may be used during the escrow process.  These include current state department of motor vehicles driver’s license or identification card passport, provided it has a photograph.

 

Here are some helpful resources to help you during the selling process:

SELLERS

What to Expect When Selling Your Home

You should select a professional real estate agent to represent your needs. Once you establish a working relationship with your agent, your home is put on the market and marketed to potential buyers. Once a buyer makes an offer on your home you have three options: accept the offer, counter the offer, or reject the offer.

After you accept an offer you can expect to do the following:
Escrow is opened and buyer deposits “earnest money” into escrow.  What is an escrow?  It is a neutral third party that handles the transfer of funds and related documents from one party to another.
Seller submits documents and information to escrow holder, such as:
– addresses of lien holders
– tax receipts
– equipment warranties
– home warranty contracts (if any)
– any leases and/or rental agreements. Seller approves and signs the escrow instructions, grant deed and other related documents required to complete the transaction.
Seller orders inspections, receives clearances and approves final reports and/or repairs to the property as required by the terms of the purchase and sale agreement (responsibility for inspection procedures may vary). Buyer and Seller fulfill any remaining conditions specified in the contract and/or escrow instructions; approves the pay off demands and/or beneficiary’s statements. Buyer and Seller approve any final changes by signing amendments to the escrow instructions or contract.
Buyer and Seller fulfill any remaining conditions specified in the contract and/or escrow instructions; approves the pay off demands and/or beneficiary’s statements.
Note: The above is general information only. Your situation may differ. Please consult your real estate professional for details about your specific situation.